Save on your Mortgage

Here's a simple trick to reduce the repayment period of your mortgage and save thousands of dollars in interest: Make extra payments which apply toward the principal. Borrowers use different methods to meet this goal. For many people,Perhaps the simplest way to keep track is to make 1 extra mortgage payment every year. If you can't pay an additional whole payment all at once, you can split that large amount into 12 smaller payments and write a check for that additional amount monthly. Another option is to pay a half payment every two weeks. The effect here is that you will make one extra monthly payment in a year. These options differ a little in lowering the final payback amount and reducing payback length, but they will all significantly reduce the duration of your mortgage and lower the total interest you will pay over the duration of the loan.

Additional One-time payment

Some borrowers can't manage any extra payments. But remember that most mortgage contracts will allow you to make additional payments at any time. You can take advantage of this provision to pay down your mortgage principal any time you get some extra money.

If, for example, you receive a surprise windfall four years into your mortgage, investing a few thousand dollars into your mortgage principal can significantly shorten the duration of your loan and save enormously on mortgage interest over the life of the mortgage loan. Unless the loan is quite large, even a few thousand dollars applied early in the loan period can yield huge savings over the life of the loan.